Syria to receive $66 million loan from European Investment Bank

Published December 12th, 2000 - 02:00 GMT

Financial cooperation between the European Union and Syria will gain new life this coming week, with the European Investment Bank (EIB) loaning Syria money - an estimated $66 million - for the first time in almost ten years. 


Francis Mayer, the EIB's vice-president, is expected in Damascus on December 14 to relaunch the institution's activities in Syria, Marc Pierini, the EU's representative in Syria, told AFP. 


Syrian officials will sign an agreement with the EIB for an estimated 75 million euro loan, or $66 million. The funds will go to bolster Syria's electricity distribution, specifically with high-voltage power lines and extra sub-stations. 


The way for new EIB loans was cleared when Berlin lifted its bank veto on Syria at the end of October, following an agreement restructuring Syrian debt to Germany, which is estimated at 1.25 billion euros, or $1.1 billion. 


Syria had already restructured its debt with France in 1996 and with Italy in May 2000. 

Meanwhile, Syria's Minister of State for Planning, Issam Zaim, is scheduled to meet EU commissioner for external relations Chris Patten in Brussels on December 15. 


Zaim and Patten will fix the euro amount for the second phase of the EU's financial aid package to Syria, which falls under the EU's assistance program to Mediterranean countries (MEDA). 


During the program's first phase, Syria obtained 35 million euros, or $31 million, in order to reform government administration, facilitate commercial transactions with European businesses and train archeologists. 


MEDA's first Syrian phase covered the period 1995-1999, but was extended to 2000, having allotted 105 million euros, or $93 million, for the modernisation of Syrian municipal and business adminstration, as well as banking. But Damascus has not been able to use all the aid due to bureaucratic hurdles. 


After his meeting with Patten, Zaim will sit with European officials, who have been negotiating a joint Syria-EU business association agreement since 1998. 


The agreement's goals are to grant the EU favored access to the Syrian market and facilitate European business investment in Syria. 


Areas of European interest are the Syrian oil and cotton markets, which already make up the largest Syrian exports to Europe and have benefitted from a customs exemption since 1979. 


Currently, EU tariffs are applied to other Syrian exports, mainly agricultural products, at a very low rate, said Pierini. 


Syrian economist Mohammad Madani has been speaking out against any such agreement with Europe since December, warning that Syria is not yet ready. He believes that Syria must restructure its public and private industries first and recommends five to ten year delay. 


However, Pierini has assured Syria that the EU envisages a transition period for the agreement of 12 years. 

"MEDA, EIB and negotiations for an association are evidence of a renewal of bilateral relations between the EU and Syria and we judge this very positively," Pierini said.— (AFP)  


© Agence France Presse 2000  

© 2000 Mena Report (

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